AMP chairman Peter Mason said both financial services businesses and financial planners must adapt to the changing circumstances of the industry in order to prosper.
Mason said the current government reviews underway are likely to result in recommendations for changes in the financial services industry, particularly the superannuation industry. As such, Mason said the company is working to prepare for the “significant changes that are likely to lie ahead”.
Mason said AMP had been in “constant dialogue” with the Federal Government since its election to understand its views on super and investment policy “and how it would like the industry to evolve”.
Mason said community expectations “are also evolving rapidly” and the role of financial planners was also “coming under sharper scrutiny”.
Speaking at the group’s annual general meeting (AGM) today, Mason said he foresees “significant changes to the competitive environment and to an industry structure evolving over the next few years”.
“Companies must evolve, as must financial planners and advisers,” Mason said.
“Those that do, and do so quickly, will prosper.”
Meanwhile, Mason said the group is continuing its focus on reducing costs by exploring options it hopes will allow it to maintain employment levels. The group has cut hundreds of staff over the past year as it sought to manage costs.
In its investment management business, the group has introduced what it calls a ‘19-day month’, which means its employees receive one unpaid day off each month. The group has also instituted a salary freeze at the executive and senior management level in this business, Mason said.
Mason said while the group is looking for “more imaginative responses” to cost pressures, the current environment allows few easy decisions and, “frankly, only tough choices”.
Also speaking at the AGM today, AMP chief executive Craig Dunn said the group is working to increase the number of financial planners in its group while also trying to “accelerate the productivity” of its existing planners, “who remain an integral part of our business”.
The group is trying to improve planner efficiencies through the use of new technology, centralised support services as well as strategic market initiatives that allow planners to proved tailored offers to more clients.
Dunn said while the changes announced in the Federal Budget this week “will impact superannuation flows in the short term, we don’t believe that impact will be as significant in the long term”.
